About Caroline McDonald

Caroline McDonald is a writer and former senior editor of the Risk Management Monitor and Risk Management magazine.
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P&C Rates in U.S. Rise 1% in February

The composite rate in the U.S. in 2015 for all property and casualty lines was up 1% in February, compared to flat in January 2015, MarketScout said today.

Pricing measurements by coverage showed no further price deterioration in any line and an increase of 1% in auto, professional liability and EPLI, from plus 1% to plus 2%. By account size, large accounts ($250,001 to $1,000,000 premium) increased from flat to plus 1%, while all other account sizes remained the same as in January, according to MarketScout.

“Could this mean underwriting executives are actually walking away from underpriced business?” asked Richard Kerr, MarketScout CEO.

“February is normally a low volume premium month so we would caution about putting too much credibility in these metrics; however, historically once the insurance market starts softening it normally accelerates rather than moderates or turns around,” he said in a statement. “We speculate insurers are not going to cut deep and long in this cycle. Big data, modeling software and improved underwriting acumen are resulting in insurers simply being too smart to fall for extended and deep price cuts.”

When measuring by industry classification, contracting, habitational, public entity and transportation all increased by 1% in February compared to January.

Summary of the February 2015 rates by coverage, industry class and account size:

By Coverage

Commercial Property         Up 1%

Business Interruption       Up 0%

BOP                                  Up 1%

Inland Marine                   Up 0%

General Liability                Up 1%

Umbrella/Excess               Up 1%

Commercial Auto              Up 2%

Workers Compensation     Up 0%

Professional Liability          Up 2%

D&O Liability                    Up 1%
EPLI                                Up 2%

Fiduciary                          Up 0%

Crime                               Up 0%

Surety                              Up 0%

 

 

 

 

 

IoT Implementation Lagging

While the Internet of Things (IoT) offers many benefits to businesses, such as keeping track of inventory, ordering products and having them delivered when needed, installing smart street lamps that monitor traffic, and detecting moisture levels in soil for optimal irrigation, most companies have yet to optimize the technology, according to a study by Accenture.

From Productivity to Outcomes: Using the Internet of Things to drive future business strategies,” found that the 87% of companies are aware of the benefits and the potential impact on their business, but only 38% believe their company’s executives understand the technology.

“Is it caution or complacency that is hindering the C-suite from harnessing the Internet of Things? This study shows that senior leaders cite multiple reasons why they have not made inroads—from constrained access to capital, to insufficient access to technology or poor information and telecommunications infrastructure,” Bruno Berthon, managing directure-Accenture Strategy commented in the report.

 

Berthon continued:

“I believe the conditions are ripe for the widespread adoption of the Internet of Things; a proliferation of data-rich sensors and devices that open up connectivity and a universal demand for faster, more efficient ways to work and live…The Internet of Things is game changing. Leaders should seek out the best outcomes—to benefit their businesses, their countries and the worldwide economy.”

Preventing Burst Water Pipes

Unrelenting frigid weather often means frozen water pipes – one of the biggest risks of property damage. In fact, a burst pipe can cause more than $5,000 in water damage, according to IBHS research.

Structures built on slab foundations, common in southern states, frequently have water pipes running through the attic, an especially vulnerable location. By contrast, in northern states, builders recognize freezing as a threat and usually do not place water pipes in unheated portions of a building or outside of insulated areas.

Freezing temperatures can be prevented with the installation of weather stripping and seals. This offers two major benefits: keeping severe winter weather out of a structure, and increasing energy efficiency by limiting drafts and reducing the amount of cold air entering.

These areas should be inspected for cold air leaks to determine where sealing is needed:

  • Windows and doors
  • Vents and fans
  • Plumbing
  • Air conditioners
  • Electrical and gas lines
  • Mail chutes

IBHS recommendations:

  • Provide a reliable back-up power source, such as a stand by generator, to ensure continuous power to the building.
  • Interior building temperature can be monitored by a central monitoring company to ensure prompt notification if the interior of the building reaches low temperatures during after hours, power outages or idle periods.
  • Recessed light fixtures in the ceiling below the open area that is directly under a roof, such as attic space, should be insulated to prevent the release of heat into the attic.
  • Check to see if there is any visible light from recessed light fixtures in the attic.
  • If there is, they are not adequately sealed or insulated. Sometimes, especially in low sloped roof buildings, the space above a suspended ceiling located below the roof may be heated and cooled like the occupied area below.
  • If that is the case, there is no need to insulate above the suspended ceiling or seal the ceiling’s penetrations.
  • Insulate all attic penetrations such as partition walls, vents, plumbing stacks, electric and mechanical chases, and access doors that are not properly sealed.
  • Ensure proper seals on all doors and windows. Depending on the building or room size, fan tests can be conducted to ensure room and pressurization tests.
  • Seal all wall cracks and penetrations including domestic and fire protection lines, electrical conduit, other utility service line, etc.
  • Sprinkler systems should be monitored by a constantly attended central station to provide early detection of a sprinkler pipe rupture due to freezing.
  • Insulation and/or heat trace tape with a reliable power source may be installed on various wet sprinkler system piping. This includes main lines coming up from underground passing through a wall as well as sprinkler branch lines.
  • UL-approved gas or electric unit heaters can be installed in unheated sprinkler control valve/fire pump rooms. If backup power is provided, the heaters should also be connected to this power source.
  • A monitored automatic excess flow switch can be placed on the main incoming domestic water line to provide early detection of a broken pipe or valve when the space is unoccupied.

 

Newer Tank Cars Were Used in Derailed Train

Updated Wednesday, 9:00 a.m.

A train hauling North Dakota Bakken shale oil derailed on Monday in Lynchburg, West Virginia, igniting several tank cars, burning down a house and prompting the shut-down of water-treatment plants, authorities said. At least one tanker from the 109-car CSX train toppled into the Kanawha River south of Charleston and was leaking crude oil.

About, 2,400 residents around Adena Village, West Virginia, were evacuated as a precaution, the Charleston Gazette reported. Emergency shelters were set up at a local school and recreation center.

It was the second derailment in a year along the same CSX line, according to Reuters. A similar incident in Lynchburg, Virginia, last April involved a train that was also headed to Plains All American Pipelines LP’s oil depot in Yorktown, Virginia.

The train was hauling newer CPC 1232 model tank cars rather than older versions widely criticized for being prone to puncture. The recommended cars have safety features that include half-inch-thick steel shields on the sides to prevent splitting if they are overturned.

With production on the rise in North America, oil companies are increasingly challenged with finding ways to transport their product.

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Pipeline networks do not yet have the capacity or flexibility to handle the job, so oil companies have relied on railroads to fill the gap.

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In 2013, rail shipments of crude oil in the United States skyrocketed, with 400,000 carloads transported compared to 4,729 in 2006, according to the Association of American Railroads (AAR).

CSX said in a statement on Tuesday:

Overnight, CSX personnel and agencies continued their assessment of the derailment scene to verify the number of rail cars involved and the extent of the potential environmental impact. CSX estimates that approximately 25 tank cars derailed and 20 cars were involved in subsequent fires; the fires around the rail cars will be allowed to burn out. When safe to do so, CSX and its experts will begin transferring oil from the damaged cars to other tanks and those tanks subsequently removed from the site. Initial assessments have confirmed that several of the cars appear to be ruptured or leaking from valves.

No rail cars entered the Kanawha River in this incident.

CSX teams continue working to deploy environmental protective and monitoring measures on land, air and in the Kanawha River as well as a creek near the company’s tracks. The company also is in contact with public officials and investigative agencies to address their needs.

Approximately 100-125 residents of homes near the derailment site remain evacuated at this time. CSX is working with the Red Cross and other relief organizations to address residents’ needs, taking into account winter storm conditions. The company opened a Community Outreach Center Tuesday, February 17, at 8 a.m.; the center will remain open until every day 8 p.m. EST or later if needed. CSX has secured a number of hotel rooms for displaced residents and is assisting them in relocating from evacuation centers to the hotels.

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CSX said on Monday that it has removed the non-derailed cars from the scene of the derailment and efforts continue to re-rail the remaining cars. The company said it is cooperating fully with agencies in the investigation being led by the National Transportation Safety Board.